Why have motorcycle COEs reached record prices in Singapore?

SINGAPORE — If you’re a motorcyclist here, you probably heard on Wednesday the unpleasant news that motorcycle Certificate of Entitlement (COE) premiums have now reached the staggering high of S$11,751.

Motorcycle industry insiders CarBuyer spoke to point to two reasons for this : 1. The continued demand for food delivery here, and 2. Malaysian-registered bikes can, once again, no longer be left in Singapore for more than 16 hours a day. 

We’ve all heard the story that food delivery services saw demand shoot up during the pandemic – some 60 percent of riders signed up during the pandemic, for example. And despite what we hope are the end stages of Covid-19 now, food delivery remains endemic, and is entering a consolidation stage.

From a rider’s perspective, owning a motorcycle is made possible by earning money through food delivery. But for those who can’t afford to own a motorcycle, or don’t want to, they can hire a motorcycle and earn some extra cash with deliveries, part time. A quarter of delivery riders use it as part-time income supplementation, says the source above. 

Searching the web shows motorcycle rental for small-capacity bikes starting at as little as S$300 a month, which means a not considerable profit of S$4,700 if you really hustle.

For the second reason, it’s directly related to a reintroduction of a ruling from the Land Transport Authority (LTA). It states that Malaysian Work Pass holders cannot leave their vehicles in Singapore for longer than 18 hours a day. This ruling was suspended for much of the pandemic era, but has resumed since July 1, 2022.

These workers may also be employed in the construction industry, which is seeing a return to pre-pandemic levels once again and is up 42 percent on the previous year. As a result, many of these individuals turn to the least expensive form of personal transport available to them, a Singapore-registered motorcycle, be it a purchased vehicle or a rental. 

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Should motorcycle COEs need to be so high? No, because there is literally no reason for the barriers to entry to be this high. In fact, motorcycle adoption should be encouraged, because congestion prevention is the reason for the COE system’s existence.

Unlike cars, motorcycles have been proven to reduce congestion in numerous studies around the world. In fact if a portion of car drivers switched to motorcycles, it could reduce parking pressure and congestion in a disproportionate – and very good – way. As is often the case here, the ‘cars are bikes with fewer wheels’ approach does no one any good.

With car COE prices thanks to ride-hire and ride-sharing firms, it’s become more clear that the push to ‘car lite’ does not immediately mean lower COE prices, but in fact, could spell the opposite.

ALSO READ: October 2022 COE results first bidding: All categories see a drop in price except for Cat D, which continues its rise

This article was first published in CarBuyer.